UAE gold prices fall more than Dh10 to lowest level in over a month

Dubai: Gold prices in the UAE fell by more than Dh10 per gram on Wednesday, taking local rates to their lowest level in over a month as global bullion extended losses amid renewed inflation concerns, higher oil prices and pressure from a stronger dollar.  (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The 24-carat rate dropped to Dh503.50 per gram on June 10, down from Dh514.25 on June 9, while 22-carat gold fell to Dh466.25 from Dh476.25. The latest move marks a steep retreat from the May 12 level of Dh567.25 for 24-carat and Dh525.25 for 22-carat, giving UAE shoppers a much lower entry point than the highs seen barely four weeks ago.

The fall comes despite fresh tensions in the Middle East, with bullion failing to benefit from its usual safe-haven status after the US launched strikes against Iran following the downing of a military helicopter. Global gold slipped as much as 2% to below $4,175 an ounce on Wednesday, after sliding 1.6% in the previous session.

Buyers see prices ease before summer travel

The drop will be closely watched by UAE residents planning jewellery purchases ahead of the summer travel and wedding season, especially after 24-carat prices fell by Dh63.75 per gram from the May 12 peak to June 10.

The decline has also pushed 22-carat gold, the preferred category for jewellery buyers, down by Dh59 per gram over the same period. That means a 20-gram purchase of 22-carat jewellery would now cost around Dh1,180 less before making charges, compared with the May 12 price.

Local rates have moved lower almost continuously in June. The 24-carat rate stood at Dh539.75 on June 1, rose briefly to Dh542.50 on June 2, and then fell to Dh503.50 by June 10. The sharper move came after June 4, when 24-carat gold was still priced at Dh538.50.

Why gold is falling despite tensions

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said gold’s correction deepened after stronger-than-expected US jobs data and renewed inflation concerns pushed bullion below its 200-day moving average for the first time since October 2023.

That level is closely tracked by institutional investors, momentum traders and systematic funds because it is often used to judge whether a longer-term price trend remains intact. A sustained break below it can trigger further selling and discourage fresh buying until prices recover.

Hansen said the current market is being driven by an energy-led inflation scare, with investors focusing on rising oil prices, higher inflation expectations, stronger bond yields and a firmer dollar. That mix has made it harder for gold to rally, even with geopolitical risks still elevated.

Gold often performs well during financial stress when investors expect central banks to cut rates, real yields to fall and the dollar to weaken. The current environment is different because higher oil prices are feeding inflation fears, making central banks more likely to keep rates elevated. That raises the opportunity cost of holding gold, which does not pay interest.

Key levels traders are watching

The next technical focus is the $4,100 to $4,075 area, according to Hansen, which includes the March correction low and the 38.2 per cent retracement of the 2022 to 2026 rally.

A move towards that range would suggest the correction has further to run, although Hansen noted that the long-term backdrop for gold remains supportive. Central bank buying, fiscal debt concerns, currency debasement risks and geopolitical fragmentation continue to support the broader case for bullion.

Near term, however, the market will need a shift in momentum before investors return in force. Hansen said gold would first need to reclaim $4,500 and then challenge the 50-day moving average near $4,600 before traders become more confident that the correction is easing.

What could change the direction

Inflation data will now be the next major driver for gold. Wednesday’s US CPI report is expected to draw close attention as investors assess whether higher energy costs are spreading into wider consumer prices.

The June 17 US Federal Reserve meeting will also be watched for signs of how policymakers view the inflation outlook. Financial markets are still pricing in a scenario where inflation remains sticky enough to delay any meaningful shift towards easier monetary policy.